visions
annual report 1999group
success
1996 1997 1998 2000➝ a common future1999
The Postbank Group – 5 years at a glance
%
1995 1996 1997 1998 1999 98/99
Payment transactions
Checking accounts DM million 4.35 4.2 4.08 4.01 3.95 – 1.5
Online banking DM million 0.40 0.43 0.47 0.56 0.66 + 17.9
Telephone banking DM million 0.68 0.70 0.77 0.96 1.22 + 27.1
ec cards DM million 1.18 1.20 1.20 1.40 1.67 + 19.3
Postbank cards DM million 3.6 3.6 3.5 3.3 3.0 – 9.1
Credit cards DM million 0.28 0.31 0.44 0.40 0.41 + 2.5
Sight deposits DM billion 28.6 27.9 26.8 28.4 30.4 + 7.0
Customer deposits business
Savings accounts DM million 20.4 20.4 20.2 19.9 19.1 – 4.0
thereof
Postbank SparCard DM million – – – 0.08 0.53 + 663
Deposit amount DM billion 91.6 97.3 97.1 101.9 103.7 + 1.8
thereof
“3000 plus” savings
accounts DM billion 31.1 37.8 41.9 46.3 47.5 + 2.6
Assets under management DM billion 1.20 1.70 2.60 3.30 5.65 + 71.2
Lending business
Consumer loans DM billion 0.01 0.10 0.32 0.67 0.85 + 26.9
Mortgage lending DM billion – 0.05 0.62 1.30 2.49 + 91.5
Employees 16,224 14,778 13,523 12,542 11,796 – 5.9
Personnel expense DM billion 1.84 1.49 1.88 1.43 1.35 – 5.6
Payments to federal
government DM million 196 – – – – –
Profit after risk
provisioning and
payments to government DM million 234 308 1.058 22 178 + 709.1
Net income/net loss
for the period DM million 226 – 1,256 27 16 857 + 5,256.3
Total equity and liabilities DM million 99,221 106,788 111,455 114,079 117,291 + 2.8
Table of Contents
2 A common future
“A new bank will emerge”
20 Report of the Supervisory Board
Financial section
22 Group Management Report
48 Notes to the consolidated financial statements
54 Statement of changes in consolidated fixed assets
66 Audit opinion
68 Consolidated balance sheet
as of December 31, 1999
70 Consolidated income statement
for the period
January 1 to December 31, 1999
A strong bank in a strong Group
Continually growing competitive pressure is shaping the banking market of the
future. Substantially increased cost consciousness, a declining “principal bank
mentality” and the trend towards modern transaction banks are causing signifi-
cant shifts. The classic division of labor in the banking business is disappearing,
large banks are discovering the retail market, and the rules of competition are
being redefined.
Postbank is facing this challenge squarely. The impetus from the Deutsche Post
WorldNet Group is livening up the Group. The traditional companies Deutsche
Post, Postbank and DSL Bank are combining their strengths to the benefit of
their joint customers.
Further increasing competitiveness
Our clearly defined growth-oriented program for the future highlights the fact
that – in addition to the necessary increase in our efficiency – we are focusing
on expanding our market position. We want to increase Postbank’s business
results to an attractive new level, decrease cost ratios appreciably, substantially
increase our lending business in selected areas, and further improve our manage-
ment of assets and liabilities – in other words, to further strengthen our com-
petitivenesss. We have now introduced around 40 individual projects in four
core areas:
• reorienting the Bank in line with its key market segments
• optimizing distribution
• expanding our product range
• reorienting information technology
Our central strategic themes include the introduction of direct brokerage, a
corporate banking campaign, strengthening Postbank as a multi-channel bank,
modernizing our branch offices, as well as taking advantage of our new partner-
ship with the leading software provider SAP. However, our forward-looking pro-
gram is not an end in itself. It is based on the belief that the customer should be
our main focus.
A new bank is emerging: Deutsche Post AG effectively became the only shareholder of
Deutsche Postbank AG on January 1, 1999. Six months later, we signed the purchase agreement
for DSL Bank shares. Our common future is based on the close interdependence of these three
companies, and we intend to realize it with an ambitious forward-looking program. The goal is clear.
We want to create a new bank – a strong bank in a strong Group.
a strong
2
3
3
1999 Activity Report
group
We focus on our customers
Focusing on our customers means aligning the entire Bank’s organizational
structure with this business philosophy. We did this in two steps on October 1,
1999:
First of all, the Chairman of Postbank’s Management Board took over responsi-
bility for the newly-established Financial Services division in Deutsche Post
Group’s Management Board. The responsibility for Postbank and Deutsche Post’s
subsidiaries thus lies with one person; all sales channels and financial products
can be controlled together.
The second key step: Postbank’s organizational structure was divided into three
market-oriented and three support departments. We combined all our business
activities with our current ten million customers – as well as those which we
will acquire – in our private customer departments. Whether these customers do
business with us via Deutsche Post branches, the Internet or call centers – these
departments are responsible for their satisfaction our and success. In order to
do justice to the importance of the Mortgage Lending business and customers’
greater need for consulting services, we plan to establish a special area of re-
sponsibility within the private customer sector in future, following the merger
with DSL Bank, which will also include third-party sales via brokers.
We have also bundled our corporate banking activities in a single department
based around our core competency, electronic banking. This focuses on our
400,000 commercial customers, to whom we would like to appeal substantially
more than in the past, as well as to our key corporate accounts. A particular
focus will be e-commerce and related finance solutions as well as state-of-the-
art payment transaction services.
Clear responsibility and customer orientation are also the focal points of our
third market-oriented department. The Financial Markets department handles
volume of more than DM 100 billion and is thus one of Postbank’s key revenue
generators. Naturally, the Financial Markets department is responsible for all
trading activities, assets & liabilities management, our funding program and
asset management.
customer
4
5
One person has held sole responsibility for both Postbank and Deutsche Post’s branch offices since 1999 –
the Chairman of Postbank’s Management Board. In addition, Postbank was divided into three market-
oriented and three support departments. As a result, we are now even closer to our customers.
1999 Activity Report
oriented
By creating the Operations department, we have consolidated the Bank’s entire
processing functions across all regions under a single area of responsibility.
The advantages: in future, the customer can expect higher quality and the Bank
simpler business processes.
The IT department includes our current technology, as well as the future SAP-
based environment. The activities of Postbank Data and the new Postbank
Systems are bundled here.
Finally, the Resources department manages our most significant asset – our
staff and their development. In addition, this department is responsible for the
Bank’s internal functions as well as legal issues and, in future, DSL Bank’s trust
business. We are exploiting Deutsche Post WorldNet’s synergies in this depart-
ment consistently, for example in real estate administration and for purchasing.
Optimization of distribution –
the first “true” multi-channel bank
We want to be the most accessible bank for our customers. A web site, no
matter how good, can generally not replace physical proximity. Quite simply,
customers like to communicate with their bank in whatever way is most appro-
priate for their purposes, e.g. calling up their account balance on their mobile
phone, ordering securities over the Internet, obtaining advice from a specialist
relating to mortgages and discussing specific issues at their branch office. In
short, the same customer wants to use different methods depending on what
precisely his needs are at any given moment. And he wants to be able to do this
in an uncomplicated and easily accessible way. This is why we intend to boost
the further expansion of all sales channels.
Postbank is the first “true” multi-channel bank in Germany. Together with
Deutsche Post, we have the largest and closest-knit network of branches of all
individual competitors. At the same time, we are one of the market leaders
in the direct banking sector by mail, telephone, the Internet, and T-Online. We
intend to do everything in our power to make this a real trademark.
The largest branch network of all its competitors and market leadership in direct banking by mail, telephone,
the Internet and T-Online makes Postbank the first true multi-channel bank in Germany.
multi-
6
7
1999 Activity Report
channel bank
Customer and competitive advantage:
the branches of Deutsche Post
Despite the boom in online and Internet banking, it will still be difficult in
future to expand business on a large scale without offering personal service
to customers. This means that over-the-counter sales at Deutsche Post’s
branches will continue to play a crucial role in business with our ten million
private customers. We are building on this concept of comprehensive one-stop
shopping, which is unique in the banking market, and on the outstanding
degree of recognition and the excellent basis of trust that we have on the
market.
By merging our service offerings into a common network of branches, Postbank
and Deutsche Post are taking the next strategic step in a cooperation that has
always existed. The two companies’ businesses are completely interdependent
with their branches forming a central interface to the customer.
The focal point of this concept are the 300 plus center branches that already
exist – and the 700 or more that will exist in the future – with their comprehen-
sive advice and self-service areas. This network of competence centers, which
will be complete by 2002, forms the core of future over-the-counter sales. It is
our goal to use the two to three million daily customer contacts for active sales
by way of carefully tailored cross-selling approaches.
Nothing can replace personal contact with the client. Over-the-counter sales at the branches of Deutsche
Post give Postbank a decisive competitive advantage.
customer
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9
1999 Activity Report
orientation
online
10
11
Internet in the limelight
The second pillar of our sales strategy are our direct sales. With 650,000 cus-
tomers, we are one of the market leaders in online banking. More than 1.2 mil-
lion customers use their accounts with us via telephone, making us the leader
also in this area. We plan to optimize this promising strategy in a focused
manner. We want to consistently integrate direct sales with our over-the-counter
channel. This will enable the customers to obtain the same information and
carry out their business at all times via all channels.
We will pay particular attention to the Internet as a state-of-the-art information,
sales and transaction medium. The introduction of mobile phone banking and
Web TV expands our opportunities for access. Due to our direct brokerage activi-
ties, electronic channels will become even more significant. The traditional
medium – the letter – complemented by the fax, rounds off our direct sales
channel.
By merging with DSL Bank we have opened up an additional sales channel. DSL
third-party sales – its supplier business – promise to provide new impetus for
Postbank, reinforcing existing relations and acquiring new cooperation partners.
As a “second-level brand”, DSL Bank will also operate independently and act as
a mortgage lending partner for around 1,500 financial service providers.
With regard to these newly emerging structures, we see substantial unused
sales potential within the Group, which is yet unexploited. Deutsche Post
contributes its potential with the largest sales network in Germany and its
outstanding market recognition. Postbank contributes, among other things, its
position as Germany’s largest online and telephone bank, while DSL Bank
rounds off the concept with its excellent reputation in the supplier business and
its prestigious sales partnerships.
Postbank is Germany’s Number One in online and telephone banking.
We intend to consistently further expand this good position.
1999 Activity Report
banking
Direct sales: Direct mail 7 million letters
Telephone banking 1.6 million customers
Online banking 650,000 customers
Over-the-counter sales: Branches of Deutsche Post 720 Center branches (planned)
2,500 standard branches
10,700 basic branches
Agency business: DSL Bank sales partners 1,500 partners
25,000 sales staff
logistics
12
13
Using synergies in the Group – developing new areas of business
As a result of the strategic expansion of the Deutsche Post WorldNet Group to
an international logistics service provider, Postbank is becoming the Group’s
principal bank for financing logistic solutions. Logistic financing is thus the sec-
ond key business area in which Deutsche Post and Postbank can display their
common strengths.
More and more companies are opting for outsourcing in the areas of logistics
and merchandise management. Deutsche Post WorldNet has established itself
extremely well with Danzas and other partners in this area. However, a truly
well-rounded service depends on providing financing at the same time.
Postbank is becoming the principal bank for the international logistics service provider
Deutsche Post WorldNet. We will provide optimal financial services along the entire value chain.
1999 Activity Report
financingLogistics finance completes the chain
Deutsche Post, Danzas and Postbank work hand in hand. From ordering to
warehouse management, order processing, dispatch preparation and transport
distribution, all workflows – and in particular all the financial transactions
related to these – are optimally structured. As a result, customers can devote
all their attention to the development of their company.
The services portfolio ranges from individual payment transactions through real
estate financing and cash forwarding, and from credit management to financing
large-scale investment projects. It also includes all business relations, from sub-
contractors to consumers.
Whether it is a small or a multinational company that is involved, Postbank,
Deutsche Post and Danzas always adapt to requirements and develop an ideal
services package together with the customer. This is because it is not the size
of a company that counts, but rather the scope of its business ideas.
14
15
Two brands – one goal: integrating DSL Bank
We are paying particular attention to the integration of DSL Bank in 2000. This
specialist institute for private and commercial mortgage lending and for the issue
of securities is the ideal complement to the services portfolio we now offer to
our private and corporate customers. DSL Bank, with its agency business, is thus
a major reinforcement for Postbank in the mortgage lending sector. The volume
of DSL Bank’s mortgage lending business amounts to DM 20 billion, as against
the DM 3 billion provided by Postbank. As a result, we are able not only to put
our know-how to much better use together, but also to achieve a substantially
improved cost and risk profile.
Such additional know-how is particularly important in the corporate business
sector for driving forward our logistic finance with Deutsche Post. The same
applies to Postbank’s innovative offerings relating to e-commerce.
Last but not least, DSL Bank has many years of experience with lucrative de-
rivative products in its financial markets unit. DSL Bank contributes a large and
successful new issues business.
We are continuing to develop our clear two-brand strategy. Using “Postbank” as
a trademark for volume business, we intend to increase the number of products
being used by the customer. In future as well, “DSL Bank” will be a reliable
partner for mortgages.
Everything the customer wants:
new business areas and new products
In order to profile Postbank as a competent lending partner – in addition to its
traditional specialties such as electronic payment transactions – we plan to
further expand the range of loan products which accompany payment trans-
actions and operating loans, as well as commercial real estate financing in the
leasing and property development sectors. Here, too, DSL Bank’s know-how is
useful to us.
new Our two-brand strategy is clearly focused. Postbank’s products and services
are tailored to the customers’ core requirements, while DSL Bank’s brand stands
for differentiated mortgage lending products.
1999 Activity Report
The independent “Business Customers” division emerged as a result of the
further development of the Postbank organization in line with its program for
the future. This division handles smaller companies, as well as freelancers and
self-employed people. Our attractive products cover payment transactions,
liquidity, financing, investments and pension products. Our business line is avail-
able for telephone consulting.
We are also meeting the challenges faced by medium-sized and large companies:
Postbank, with its leading market position and excellent settlement of payment
transactions, DSL Bank with its high level of expertise in commercial real estate
finance, and Deutsche Post with its networking potential. A common strategy for
this target group and a “Selective Strategy for Foreign Business” are effective
steps towards bundling performance.
The introduction of e-commerce, payment transactions and communication on
the market are a focal point. Deutsche Post and Postbank have an unparalleled
advantage in this area: an end-to-end chain of ordering, delivery, invoicing
and payment processes.
Our new business area, direct brokerage, will be the focus of our new product
launches. We began expanding this area during the summer of 1999. Our goals
are ambitious: Postbank intends to become one of the leading brokerage service
providers in Germany in terms of both volume and scope. With 250,000 planned
deposit accounts, we are already optimistic in our first full fiscal year, that we
will rank among the big names in this sector. We have transferred the responsi-
bility for success in this extremely dynamic market – which has a unique “culture”
of its own – to our new subsidiary, Postbank EasyTrade.AG.
goals
direct
Direct brokerage on the starting line
Postbank’s recently founded brokerage company is called Postbank EasyTrade.AG.
During the pilot phase, selected customers and employees are subjecting this
new area of business to a critical test as part of a friends & family program: they
are carrying out securities transactions under real market conditions. The critical
phase will begin in summer 2000, when Postbank EasyTrade. AG enters the
market.
We have acquired strong partners in this area: the FrontOffice system of
Netlife AG forms the interface to all other functions. WPS Bank will take over
full service in the BackOffice, i.e. order processing and adminstrative and
custody processes.
The latest development is WAP: Postbank EasyTrade.AG’s customers will be
able to process their orders via their mobile phones in the future. Netlife AG has
developed a mobile brokerage application with our subsidiary based on the
WAP standard, which runs on all WAP-enabled mobile phones currently on the
market.
16
17
Postbank’s recently founded brokerage company has made a very promising start. Its cooperation
with Wüstenrot is a success story. And Postbank funds continue to be real winners.
1999 Activity Report
brokerage
The cooperation with the Wüstenrot savings and loan association has been
extremely successful in the area of home loan and savings contracts. In 1999,
Postbank sold contracts worth over DM 1 billion. This corresponds to an increase
of more than 80 percent over 1998. The cooperative venture has also shown
progress in the area of mortgages. In order to better service to customers we are
establishing fixed mortgage finance centers.
A successful partnership also exists with HDI Haftpflichtverband der Deutschen
Industrie. Together, we founded PB Versicherung AG and PB Lebensversiche-
rung AG. Under the name “PB Versicherung – A Partner of Postbank and
Deutsche Post”, we have successfully been providing pension, accident and life
insurance policies since April 1999. Risk and credit life insurance relating to
private loans are also part of our product range.
We are also paying particular attention to the “winners” in Postbank’s product
range – investment funds. We plan to expand business appreciably with new
equities funds, corporate customer funds and an e-commerce fund. Postbank
has now made a good name for itself in this area. The fact that the international
equities fund “Postbank Global Player”, which was launched in March 2000, has
already exceeded the DM 1 billion mark after only ten weeks is proof of this.
Postbank funds well ahead
Once again, we received an award for our successful investment fund “Postbank
Dynamik Global”. The magazine “Capital” awarded it first place in its “Global
Equities funds” category. In addition, the judges ranked the fund among the
cream of the investment community, awarding it five stars, the highest possible
rating. Only 22 of the around 1,400 funds tested received this rating.
In addition to charting the growth in value of “Postbank Dynamik Global” over
a period of three years, the award also takes the risk and the continuity of man-
agement performance into account.
18
19
Reorientation of information technology
The success or failure of a bank is increasingly determined by its IT systems.
This is particularly true for Postbank with its many different sales channels and
enormous volumes. If we are to realize our ambitious plans, we require infor-
mation technology with a guaranteed future. For this reason, we have resolved
to replace our information technology (IT) throughout the enterprise with state-
of-the-art systems based on cost-efficient market standards.
We are focusing here on our strategic partnership with SAP – the company that
has put itself at the forefront of the technological future. With Postbank’s assist-
ance – we have selected almost 100 employees specially for this – SAP is fur-
ther developing a standard software package for operating applications at large
banks. Postbank is acting as SAP’s exclusive pilot partner and is thus setting the
pace for the financial services sector as a whole.
The cooperation agreement concluded in July 1999 served as the kick-off for a
crucial project aimed at highly-automated, largely paperless processing of all
business transactions. This SAP solution forms the basis for the introduction of a
new systems environment geared towards future requirements in all areas and
all branches of Postbank by the end of 2003. Last but not least, this IT architec-
ture will also become the core of our brokerage business.
clear 1999 Activity Report
Major challenges for IT
Since the middle of 1999, we have been making this cooperation with the lead-
ing software provider SAP a reality. We are defining the business processes to
be supported and the resulting demands on SAP software. The goal is the fast,
appropriate and definitive handling of customer demands via all sales channels.
Over the next few years, our IT unit will be faced with the challenge of prepar-
ing our entire IT systems for implementing the SAP system, as well as perform-
ing the restructuring and upgrading measures associated with it by the end of
2003. At the same time, the sector must ensure that Postbank’s current system
environment is not only dealt with, but will also be continually adapted to meet
current requirements.
Overall, our technological platforms are based on established standards. As a
result, our information processing will also be reorganized in the future. We plan
to bundle Postbank and DSL Bank’s IT activities in a new subsidiary, Postbank
Systems AG. This company will be responsible for the future IT strategy.
Planning horizon for an ambitious vision
Our program for the future has achieved initial successes in many sections of
the Bank and thus sent clear signals about the company’s restructuring program
which is already underway. Our employees are motivated and are actively in-
volved in shaping the future. The path we are taking is fascinating and requires
our undivided attention. Together, we are working torwards our goals.
signals
20
21
The Supervisory Board has fulfilled the obligations required of it by law and the
Articles of Association and supervised Postbank’s management in an ongoing
and timely manner. Four regular meetings and two extraordinary meetings of the
Supervisory Board took place in fiscal year 1999. The Executive Committee met
five times, the Lending and Equity Investments Committee six times, the Human
Resources Committee twice and the Financial Reporting Committee once in fis-
cal year 1999.
The Management Board informed the Supervisory Board about the Bank’s situ-
ation and development by providing up-to-date reports. The Supervisory Board
meetings explained the development of Postbank’s business and earnings in
detail; additional reports provided comprehensive information on the overall
situation and on particular events. The Supervisory Board was fully consulted
on all the Bank’s measures requiring its approval.
The composition of the Supervisory Board changed during fiscal year 1999. The
existing Chairman of the Supervisory Board, Dr. Hans Friderichs, who chaired
Postbank’s Supervisory Board since autumn 1989, ended on January 7, 1999.
Dr. Thea Brünner resigned from office on January 8, 1999. Prof. Dr. Paul Laufs
was removed from the Supervisory Board by the extraordinary General Meeting
on January 11, 1999.
The Annual General Meeting elected Dr. Edgar Ernst, Dr. Hans-Dieter Petram,
Dr. Alfred Tacke and Dr. Klaus Zumwinkel as new members of the Supervisory
Board. The extraordinary meeting of the Supervisory Board on the same day
appointed Dr. Zumwinkel as the Chairman of the Supervisory Board.
An additional extraordinary meeting of the Supervisory Board on January 25,
1999 appointed Prof. Dr. Wulf von Schimmelmann as the new Chairman of the
Management Board of Deutsche Postbank AG with effect from February 1, 1999.
Dr. Dieter Boening, Chairman of the Management Board, and Joachim Sperbel
retired from Postbank’s Mangement Board on January 31, 1999 by mutual
agreement; Rainer Neumann left by mutual agreement on October 31, 1999.
The meeting of the Supervisory Board on November 30, 1999 elected Loukas
Rizos as a member of the Management Board from spring 2000.
Report of the SupervisoryBoard
1999 Report of the Supervisory Board
The parent bank financial statements, the consolidated financial statements, the
Management Reports and the dependent companies’ report were audited by
PwC, Deutsche Revision, Düsseldorf, and issued with an unqualified audit certi-
ficate.
The audit reports of PwC were discussed in detail at the Supervisory Board
meeting on March 14, 2000 in the presence of the auditor following thorough
previous examination by the Financial Reporting Committee. The Supervisory
Board’s examination did not lead to any objections. The Supervisory Board
approved the annual financial statements of Deutsche Postbank AG prepared
by the Management Board, which are thus adopted. The Supervisory Board
agrees with the proposal for the appropriation of the profits.
The Supervisory Board wishes to thank its former members, the members of the
Management Board and the management of its subsidiaries, all employees, and
the works councils of the companies belonging to the Deutsche Postbank Group
for their commitment and successful work during the past fiscal year.
Bonn, March 14, 2000
Dr. Klaus Zumwinkel
Chairman of the Supervisory Board
Facing the new millennium with an ambitious program for the future and without any Y2K problems. Customer
deposits business continues to dominate balance sheet. On the way to becoming a leading lender. Market lead
in online banking consolidated. Postbank investment funds among the best. Acquisition of DSL Bank rounds off
product range. Sales link to Deutsche Post strengthens selling power. 1999 was a year of new departures.
chances
22
23
Group Management
1999 Report
Economic framework
The dynamic growth of the world economy accelerated in the course of last
year. The majority of the transition economies in Asia showed clear signs of
recovery, while the crises in the real economies of Russia and Brazil turned out
to be less severe than at first expected. Once again, the USA retained its pos-
ition as the global growth driver in 1999. The German economy profited in the
course of the year from the improvement in the global economic environment
and the decline in the external value of the euro. Due to the export-driven up-
swing in the second half of the year, the real gross domestic product rose by
1.4 percent in 1999 compared to the previous year.
Increasing oil prices led in the course of the year to high inflation rates on both
sides of the Atlantic. Although price increases remained moderate up to the end
of the year, fear of inflation became a subject of increased concern to the inter-
national financial markets. The German bond market could not escape the effect
of the increased interest rates in the USA, with the result that long-term dom-
estic capital market rates increased clearly in the course of the year – by around
1 3/4 percentage points – as against their low in January 1999.
The millennium date change: a challenge mastered with flying colors
Postbank administers four million checking accounts and twenty million savings
accounts for its ten million customers. 20,000 counters in 14,000 Deutsche Post
branch offices, around 1,700 ATMs and the voice-enabled computers used in
telephone banking all had to be checked for Y2K compliance. Not that this
proved to be a problem: in contrast to the situation at other banks and savings
banks, Postbank customers were even able to use our ATMs on New Year’s Eve.
2000
Cards business
in thousands
1995 1996 1997 1998 1999
1995 1996 1997 1998 1999
Credit cards 276 312 338 401 406
ec cards 1,177 1,195 1,213 1,437 1,673
Postbank cards 3,569 3,553 3,547 3,284 3,009
SparCard –
Savings account cards – – – 83 534
Total 5,022 5,060 5,098 5,205 5,622
1995 1996 1997 1998 1999
Total 881 1,173 1,346 1,575 1,700
Expansion of ATM network
number of ATMs
1995 1996 1997 1998 1999
24
25
Prof. Dr. Wulf von Schimmelmann new Chairman
of the Postbank Management Board
On February 1, 1999 Prof. Dr. Wulf von Schimmelmann was appointed as the
Chairman of the Management Board of Postbank, replacing Dr. Dieter Boening,
who had headed the Bank since July 1, 1997. Already on January 11, 1999, the
Supervisory Board of Deutsche Postbank AG appointed the Chairman of the
Management Board of Deutsche Post AG, Dr. Klaus Zumwinkel, as its head.
Customer deposits business continues to be a winner
The savings opportunities offered by Postbank continued to be highly attractive
in 1999. In fact, Postbank was able to extend its market lead in this area. Its
“Sparen 3000 plus“ savings product accounted for the lion’s share of business
(82.5 percent), while the newly introduced “Kapital plus“ savings product estab-
lished itself with customers right from the start. The “Postbank SparCard“
introduced the previous year was a particular success.
1999 Group Management Report
Total deposits
in DM billion 1995 1996 1997 1998 1999
Savings deposits 57.1 59.8 60.7 62.7 57.6
Savings certificates,
Time deposits 5.9 9.6 9.6 10.8 15.7
Sight deposits 28.6 27.9 26.8 28.4 30.4
Total 91.6 97.3 97.1 101.9 103.7
1995 1996 1997 1998 1999
Rapid increase in retail banking and mortgage lending
The annuity loans granted to customers doubled in 1999 in comparison to
the previous year, with the average size of the 26,379 new loans rising to
DM 17,200. The tighter integration of all Deutsche Post branch offices in 2000
will provide further impetus in this area. Postbank’s declared goal is to become
one of the leading suppliers of consumer loans in Germany. In addition, new
mortgage lending increased substantially, with the total contract portfolio
amounting to almost DM 3 billion as at December 31, 1999.
Online banking: further expansion of market lead
The number of telephone banking callers in 1999 rose by an impressive 62 per-
cent, while the number of calls to our direct service and our voice-enabled
computers increased even more, to around 26 million (79.5 percent). Given our
24x7 availability, this means that 74,000 customers contact Postbank by tele-
phone every day.
Roughly 650,000 customers already manage their Postbank accounts via the
Internet or T-Online today. The number of transfers made via this channel rose
by nearly 15 percent to over 15 million.
Postbank now an expert lending partner for corporate customers
In addition to being a specialist in the area of payment transactions, Postbank
also intends to provide its corporate customers with advice on lending in the
future. We are developing the add-on credit products for our payments services
further and are also offering net working capital financing. In addition, Postbank
is participating in selected syndicated loans. Last but not least, we will be offer-
ing commercial real estate and special finance solutions in the areas of property
development and leasing together with DSL Bank.
New unit for business customers established
As part of the ongoing development of the Postbank’s organizational structure,
a dedicated unit for business customers was established within the Corporate
Customers division. This unit provides support for companies with annual sales
of up to DM 5 million self-employed individuals and small independent busi-
nesses.
The business strategy behind this unit is similar to that in the retail customer
business. The immediate focus is on the development of standardized trans-
parent products for this target group. Customers are provided with telephone
advice via our business line and have access to qualified advisors in our Center
branches. In addition, mobile business customer advisors are available when-
ever and wherever needed. In this segment as everywhere else, Postbank’s
basic principle applies: products and services have to be as easily-advailable,
fast and cost-effective as possible.
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1999 Group Management Report
Developments in online banking and telephone banking
number of accounts
Funds business continues to expand
The Postbank Group’s entire fund portfolio has developed extremely positively.
This applies not only to products from Postbank Privat Investment (PPI) in Bonn
but also to the funds offered by Deutsche Postbank International S.A., Luxem-
bourg, which have been successful for many years now, as well as to the special
investment funds offered by Deutsche Postbank Invest Kapitalanlagegesell-
schaft mbH, Bonn, which specializes in this area.
PPI’s “Europafonds Aktien“ (Stocks Europe) produced a return in 1999 of almost
40 percent, and was followed by its “Europafonds Plus“(Stocks Europe Plus).
“Postbank Dynamik Garant II“, Deutsche Postbank Asset Management S.A.’s
European share guarantee fund, is a limited special offer to investors.
The German finance magazine “Capital“ ranked the “Postbank Dynamik Global“
fund managed by Deutsche Postbank International S.A. first among the global
equity funds.
The volume of funds under management by Deutsche Postbank Invest
Kapitalanlagegesellschaft mbH at the end of 1999 amounted to almost
DM 15 billion. 19 specialized funds were managed.
Since the chances are good that the year 2000 will be another bumper year for
securities, Postbank’s fund management companies are confident about the
short-term future.
1995 1996 1997 1998 1999
Online banking 401,000 432,000 466,000 561,000 660,000
Telephone banking 670,000 683,000 770,000 960,000 1,220,000
Total 1,071,000 1,115,000 1,236,000 1,521,000 1,880,000
1995 1996 1997 1998 1999
Successful start for PB insurance companies
Our joint ventures with HDI, PB Lebensversicherung AG and PB Versicherung AG
started active operations in mid-April 1999 under the name of “PB Versiche-
rung“. This Postbank and Deutsche Post partner offers pension and accident
insurance as well as credit life insurance in connection with consumer loans.
Acquisition of DSL Bank
In the middle of the year, Postbank and the Federal Ministry of Finance agreed
that Postbank would acquire the Federal Government’s interest in DSL Bank with
effect from January 1, 2000. Postbank had already held more than 80 percent of
the shares in DSL Holding AG since October 1999.
DSL Bank specializes in private and commercial mortgage finance as well as in
issuing securities. In future, these services will be used to supplement and
strengthen Postbank’s product range.
The multi-channel bank: all roads lead to the customer
The sales partnership between Postbank and Deutsche Post was further
strengthened by the integration of DSL Bank with its agency-based sales model.
The multiple sales channels and the resulting intensive advice as well as the
high-quality advice tailored to customer needs in each case make Postbank the
first true multi-channel bank in Germany.
Together with Deutsche Post, Postbank has one of the largest fixed sales net-
works in place with a very wide geographical coverage. It has long been the
28
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1999 Group Management Report
leader in the area of direct banking via the telephone, the Internet and T-Online.
Now DSL’s agency sales, comprising roughly 1,500 partners and their 25,000
employees, are being added.
New divisional organization strengthens sales force and improves work-
flow transparency
On October 1, 1999, Prof. Dr. von Schimmelmann, Chairman of the Management
Board of Postbank, was appointed to the Group Management Board of Deutsche
Post AG, where he is responsible for financial services (i.e. Postbank and the
branch offices). This dual function underlines the importance that the alliance
between Postbank and Deutsche Post attaches to the financial services division
on the one hand and fixed branch sales channel on the other. All activities by
the partners to the alliance are now being optimally coordinated.
In order to be able to react as flexibly as possible to increased market require-
ments on Postbank, the members of the Management Board with responsibility
for Retail Customers, Corporate Customers and the newly created Financial
Markets area are now also responsible for the profitability of these areas.
Future-oriented strategic partnership with SAP
Postbank has concluded a strategic partnership with the world-famous software
company SAP. The goal is to use Postbank as a reference customer for the fur-
ther development of SAP’s standard software for major banks’ core operational
processes. This will result in software for the financial services sector that sup-
ports all the standard products in a major retail bank.
At the end of this development process we will have a completely revamped
IT infrastructure that will ensure that processing of all transactions within
the Group takes place in as automated and paperless a manner as possible.
Postbank is the first German bank to decide to reengineer its IT to such a funda-
mental extent.
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31
Cooperation with Wüstenrot proves its value
Since the end of 1997, Postbank has been brokering home savings and loan con-
tracts for its partner Wüstenrot. Last year the value of these contracts amounted
to over DM 1 billion – twice the figure for the previous year. At the same time,
Postbank’s earnings rose by a factor of three and a half.
Postbank’s Mortage Lending unit will become more important in future, with
the home savings and loan contracts brokered for Wüstenrot being joined by an
increase in commercial mortage lending products which will be offered under
the DSL Bank brand, particularly as agency business.
Optimal concentration of payments
Postbank’s core competency has always been payment transactions, and it is
only natural that we continuously focus on optimizing and improving the profit-
ability of this area of our activities in particular.
For example, we decided to concentrate both domestic and foreign payments,
both in order to achieve synergy effects and to reduce to a minimum the time
needed to perform and settle customer orders by streamlining as many unneces-
sary interfaces as possible.
1999 Group Management Report
Customer accounts
in millions 1995 1996 1997 1998 1999
Savings accounts 20.40 20.40 19.10 19.67 19.14
Checking accounts 4.35 4.20 4.10 4.01 3.95
Thereof online/
telephone banking 1.08 1.13 1.24 1.56 1.88
Total 24.75 24.60 23.20 23.68 23.09
1995 1996 1997 1998 1999
Thus the number of domestic payments locations was reduced from 14 to 5 with-
in the space of only ten months. This not only directly benefited our customers
but also tangibly improved the profitability of this area of our business.
All foreign payments transactions were consolidated in a single location in
Saarbrücken, a task that was completed within five months. This has resulted
in processing times becoming noticeably faster.
Active credit management implemented
The extension of our lending business and compliance with the regulatory
requirements naturally entail active credit management. Implementation of this
has already started and customer-specific risk measurement procedures have
been introduced.
Postbank’s future credit risk management system will manage credit risks both
at the level of individual transactions and at the portfolio level. The commercial
scoring and rating procedures introduced at the level of individual transactions
will support the decision-making process and help identify credit risks at an
early stage, thereby minimizing loan defaults.
Further increase in total assets
In the year under report total assets rose from DM 114,079 million at the end of
the previous year by DM 3,212 million or 2.8 percent to DM 117,291 million as
of December 31, 1999.
Liabilities and shareholders’ equity
Customer business dominates liabilities and shareholders’ equity
In the year under report liabilities to non-bank customers once again dominated
Postbank’s balance sheet, accounting for 88.4 percent of total liabilities and
shareholders’ equity. They amounted to DM 103,718 million as of December 31,
1999, after DM 101,878 million the previous year.
Switch from savings deposits to longer-term time deposits –
slight expansion of market position
The revamping of our product range in the savings area led to a decline in sav-
ings deposits of DM 5,099 million or 8.1 percent, to DM 57,600 million. However,
this drop was more than compensated for by our new savings product “Kapital
plus“, for example, which is disclosed under Other liabilities with an agreed
maturity (up DM 5,721 million).
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33
Savings deposits with an agreed withdrawal notice of three months
in DM million 1995 1996 1997 1998 1999
Sparbuch 3000 plus 31,124 37,855 41,889 46,284 47,529
Dynamic interest rate
savings account 3,285 1,782 783 312 123
Other 10,906 9,959 9,060 7,777 6,836
Total 45,315 49,596 51,732 54,373 54,488
1995 1996 1997 1998 1999
Balance sheet structure
and developments in the
balance sheet
1999 Group Management Report
Savings deposits with an agreed withdrawal notice of more than three months
in DM million 1995 1996 1997 1998 1999
Fixed-interest savings 9,428 8,138 7,113 6,653 1,627
Other 2,312 2,065 1,878 1,673 1,485
Total 11,740 10,203 8,991 8,326 3,112
1995 1996 1997 1998 1999
“3000 plus“ savings program
Once again, our “3000 plus“ savings book grew in the year under report. This
growth, by a further DM 1,245 million (plus 2.7 percent) increased the share of
total savings deposits accounted for by this successful savings product to 82.5
percent (previous year: 74 percent).
Other liabilities to non-bank customers
ChangeDec. 31, 1999 Dec. 31, 1998 as against Dec. 31, 1998
DM million DM million in DM million in%
Payable on demand 30,375 28,371 2,004 7.1
With agreed maturity or withdrawal notice
Time deposits 6,703 6,724 – 21 – 0.3
Kapital Plus 5,721 – 5,721 > 100
Savings certificates 3,319 4,084 – 765 – 18.7
Subtotal 15,743 10,808 4,935 45.7
Total 46,118 39,179 6,939 17.7
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1999 Group Management Report
Current account deposits and overnight deposits
On the balance sheet date, the customer deposits grouped together in the Lia-
bilities payable on demand item in the amount of DM 30,375 million were up
DM 2,004 million or 7.1 percent as against the figure for the end of 1998.
“Kapital Plus”, savings certificates and other time deposits
The introduction of our “Kapital plus“ product resulted in deposits totaling DM
5,721 million in its first year. This product, part of our revamped product range,
replaces our previous savings offerings for deposits with maturities of more
than three months, including savings certificates and time deposits.
Provisions
Provisions declined from DM 3,075 million at the end of the previous year to
DM 2,337 million as of December 31, 1999. This drop is mainly due to the
restructuring measures performed in the context of our sales partnership with
Deutsche Post AG (DM 1,043 million). Special factors led to additions to the
provisions for pensions in the amount of DM 109 million.
Fund for general banking risks
Reserves totaling DM 1,300 million were allocated to the fund for general bank-
ing risks in the year under report by means of a reclassification of the reserves
created under Art. 340f HGB (Handelsgesetzbuch – German Commercial Code).
This increased our corporate liability base in accordance with the provisions of
the KWG (Kreditwesengesetz – German Banking Act).
Assets
Postbank’s assets reflect its investment activities on the money and capital market.
Development of key asset items
ChangeDec. 31, 1999 Dec. 31, 1998 as against Dec. 31, 1998
DM million DM million in DM million in %
Due from banks 52,796 63,309 – 10,513 – 16.6
Bonds and otherfixed-income securities 31,300 27,159 4,141 15.3
Shares and othernon-fixed-income securities 14,440 10,258 4,182 40.8
Due from customers 6,977 5,653 1,324 23.4
Total 105,513 106,379 – 866 – 0.8
Due from banks
Due from banks declined by DM 10,513 million to DM 52,796 million. This bal-
ance sheet item remains the largest position on the assets side of the balance
sheet, at 45.0 percent (previous year: 55.5 percent) of the total.
Bonds and other fixed-income securities
ChangeDec. 31, 1999 Dec. 31, 1998 as against Dec. 31, 1998
DM million DM million in DM million in %
Public issuers 2,910 6,546 – 3,636 – 55.5
Other issuers 28,390 20,613 7,777 37.7
Total 31,300 27,159 4,141 15.2
Bonds and other fixed-income securities amounted to DM 31,300 million as of
December 31, 1999. This corresponds to 26.4 percent of total assets.
36
37
Shares and other non-fixed-income securities
The carrying value of shares and other non-fixed-income securities as of Decem-
ber 31, 1999 is DM 14,440 million. The increase in this item of DM 4,182 million
mainly results from increases in existing funds.
Due from customers
As of December 31, 1999, due from customers amounted to DM 6,977 million,
up from DM 5,653 million the previous year.
Total annuity loans amounted to DM 852 million, up from DM 673 million
the previous year. Total mortgage lending rose by DM 1,169 million to
DM 2,494 million.
Relationship to affiliated companies
The Management Board issued a affiliated companies report and stated as
follows,“... on the basis of the circumstances prevailing at the time of each
transaction, Postbank received an appropriate consideration for each service
within the meaning of this report. No measures were taken or omitted at the
instruction or in the interests of Deutsche Post AG or its affiliates.“
1999 Group Management Report
Income Statement
Jan. 1–Dec. 31, Jan. 1–Dec. 31, Change1999 1998 as against 1998
DM million DM million in DM million %
Net interest income 2,765 2,639 126 4.8
Net commission income 784 788 – 4 – 0.5
Net underwriting income 3 0 3 > 100
Net profit/loss on financial operations 7 29 – 22 – 75.9
Personnel expenses 1,354 1,430 – 76 – 5.3
Other administrative expenses 1,618 1,794 – 176 – 9.8
Depreciation of tangible assets 213 208 5 2.4
Administrative expenses(incl. depreciation) 3,185 3,432 – 247 – 7.2
Net other operating income/ expenses 186 201 – 15 – 7.5
Operating result before provisions for risk 560 225 335 > 100
Provisions for risk – 382 – 203 – 179 88.2
Operating result after provisions for risk 178 22 156 > 100
Net extraordinaryincome/expense 970 – 970
Operating result before taxes 1,148 22 1,126 > 100
Taxes on income 291 6 285 > 100
Net income for the year 857 16 841 > 100
Net interest income
Net interest income rose by DM 126 million or 4.8 percent to DM 2,765 million.
DM 4,661 million in interest income were generated from lending and money
market transactions and from fixed-income securities and book-entry securities
(previous year: DM 4,887 million). This reduction is primarily due to the decline
in interest. Current income from shares and other non-fixed-income securities
amounted in the period under report to DM 512 million, as opposed to DM 478
million the previous year. Income from profit and loss transfer agreements rose
to DM 2 million.
At DM 2,410 million, total interest expenses, especially for savings deposits, time
deposits and open market transactions, were DM 317 million lower than in the
previous year.
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39
Net commission income
Net commission income declined in fiscal year 1999 by DM 4 million to DM 784
million. Net income from securities transactions developed gratifyingly. In con-
trast, revenue from payments services declined due to the changes in terms and
conditions during the previous year.
Net profit on financial operations
A net profit on financial operations of DM 7 million was produced (previous
year: DM 29 million). The decline in revenue mainly resulted from the drop in net
income from foreign exchange transactions due to the introduction of the euro.
Administrative expenses
Administrative expenses including depreciation on tangible assets amounted
in 1999 to DM 3,185 million, as opposed to DM 3,432 million the previous
year. Personnel expenses declined overall by DM 76 million to DM 1,354 mil-
lion, with wages and salaries dropping by DM 44 million to DM 821 million.
Social security contributions and pension costs amounted to DM 533 million,
following DM 565 million the previous year. Other administrative expenses
declined in the year under report by DM 176 million from DM 1,794 million to
DM 1,618 million, a drop of 9.8 percent. Restructuring of the sales partnership
with Deutsche Post AG contributed to the decline.
In addition, Postbank’s cost situation improved as a result of optimization of
the organization of the operations centers, branch locations and head office.
We are actively pursuing the introduction of cost-efficient processes.
Operating result and provisions for risks
The operating result before provisions for risks in 1999 amounted to DM 560
million (previous year: DM 225 million). Following additions to the provisions
for risks, the operating result amounted to DM 178 million, as against DM 22
million the previous year.
Net extraordinary income/expenses
The positive net extraordinary income/expenses primarily result from the write-
back of the provision for the sales partnership.
Net income for the year and changes in shareholders’ equity
In fiscal year 1999 the Postbank Group produced net income of DM 857 million,
as compared with DM 16 million the previous year. Shareholders’ equity (not
including net retained profits) as of December 31, 1999 amounted to DM 3,327
million (previous year: DM 3,147 million).
1999 Group Management Report
Organization of risk management
On the basis of guidelines approved by the Management Board, the Financial
Markets division is responsible for the management of the market price and
liquidity risks, while the management of counterparty risks is the responsibility
of the Chief Credit Officer. In addition, the Loans and Deposits Committee (for
market price and liquidity risks) and the Credit Investment Committee (for coun-
terparty risks), support the operational units that conduct day-to-day business
and manage the risk profile of the individual divisions.
At the strategic level a Risk Committee supports the Management Board in all
risk-related issues. These include in particular making suggestions as regards
appropriate methods and processes for managing, quantifying, limiting and
monitoring the risks facing the Postbank Group. Equally, the Risk Committee is
responsible for preparing decisions regarding the allocation of risk capital, which
is apportioned to the different divisions within the bank in accordance with a
risk/reward analysis. At present, the current risk capital allocation to trading required
by the “Mindestanforderungen an das Betreiben von Handelsgeschäften“ (MaH –
Minimum Standards for Securities Trading at Credit Institutions) is being ex-
panded to produce an overall bank allocation within the framework of overall
risk management for the bank.
Risk Report
Risk Control Functions
Postbank’s risk control department performs its functions independently at
Postbank headquarters for the entire Postbank Group. It is organized into two
different functions: trading risk control and overall bank risk control.
The key tasks performed by Postbank’s risk control function are risk identifi-
cation and ongoing risk quantification, risk monitoring and risk reporting for
market and liquidity price risks, and monitoring of compliance with counterparty
limits for all transactions in line with the “Mindestanforderungen an das Betrei-
ben von Handelsgeschäften (MaH)”. In doing so, Postbank makes use of modern
processes and suitable mathematical/statistical models and procedures. In par-
ticular, the value-at-risk (VaR) approach is used for market price risks. In ad-
dition, the ongoing ascertainment and reporting of the operating results of the
trading departments is a core function of the risk control department. Rounding
off the list of tasks are independent quality control of the market parameters
used for measuring risks and results, and the further development and group-
wide application of methods and systems based on uniform risk standards and
risk/reward analyses.
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41
1999 Group Management Report
Ongoing expansion of our product range
90-day credit facility
Savings certificate (4 and 6 years)
Postbank Card
Issue of Eurocard
Cash service
Sparbuch 3000 plus
Capital life insurance (brokerage)
EUROGIRO
Issue of VISA card
Investment certificates
Telephone service
Investment certificates (2nd generation)
Private customer loans
Share/fixed-interest security funds
Term life assurance
Standard credit facilities
Euro term deposits
Time deposits
Express transfer service (abroad)
Mortgage lending
Cash card
Internet
Standard overdrafts for corporate customers
Foreign exchange accounts
Internet home banking
Home savings and loans
Postbank Giro plus
July Oct AprJan1992
July Oct AprJan1993
July Oct AprJan1994
July Oct AprJan1995
July Oct AprJan1996
July Oct AprJan1997
July Oct July OctAprJan1998
JulyAprJan1999
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Oct Jan2000
Cybercash
SparCard 3000 plus
Apr July Oct Jan2001
• • • • •
Postbank Kapital plus, Postbank Sparplan
Life, pension and accident insurance
Corporate card
Investment funds for business customers
Commercial real estate financing
Open-ended property funds
Brokerage
Pension programs for business customers
Monitoring of market price risk
We define the market price risk as the potential loss that can arise for our pos-
itions as a result of changes in market prices. At Postbank, market prices risks are
monitored by a system of limits and sublimits for transactions in accordance with
the MaH, on the basis of the value-at-risk approach. Overall limits and sublimits
are updated dynamically in line with results and are approved by the Group
Management Board, which lays down the maximum sums involved. Compliance
with the limits for transactions are monitored daily.
The VaR parameters adopted were a holding period of 10 days, a history of
250 days and a confidence level of 99 percent. The effect of extraordinary
events not covered by the value-at-risk procedures on the asset position of
Postbank is quantified using regular worst case scenario analyses. These worst
case scenarios are derived from historical distribution analyses.
Postbank also calculates a monthly value-at-risk figure for the bank overall; this
describes the aggregate market price risk for the entire bank, including non-
trading positions.
The procedures used for daily risk measurement are regularly subjected to back-
testing in order to assure their reliability. In this process, the significance of the
value-at-risk procedures, which are based on historical market movements, is
tested by comparing the daily non action profit and loss with the value-at-risk for
all trades. The figures are analyzed using the Bank for International Settlement’s
three-zone approach, dated January 1996.
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43
1999 Group Management Report
Jahr 1999 Ausblick Value-at-risk
The value-at-risk of the trading portfolios (holding period: 10 days, history: 250
days, confidence level: 99 percent) of Deutsche Postbank AG as of December 31,
1999 amounted to DM 2.5 million.
During 1999 the value-at-risk risk measure for the trading portfolios amounted
on average to DM 1.2 million and ranged from DM 0 million to DM 6.2 million.
in DM million Financial Financial Financial OverallMarkets Markets Markets trading book
Interest rate Interest rate Interest rate incl. correlationtrading trading trading
Money market Capital market Stock trading
Value-at-Risk as of Dec. 31, 1999 2.5 0 0.2 2.5
Minimum value-at-risk 1999 0 0 0 0
Maximum value-at-risk 1999 3.1 6.2 1.5 6.2
Average value-at-risk 1999 0.5 0.6 0.5 1.2
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45
Monitoring of counterparty exposure
Postbank defines counterparty exposure as the default risk, credit risk, settle-
ment risk, counterparty risk and country risk. In the lendings business, the coun-
terparty default risk is managed by the Bank on a case-by-case basis by granting
debtor-specific limits and limits for country risks. The Bank is currently devel-
oping a credit portfolio management model designed to measure credit risks
and create the organizational framework for their management.
The Bank’s IT systems environment enables the online assignment of trans-
actions to the counterparty limit concerned as well as online monitoring.
Derivates are monitored as credit equivalents on the basis of the marking-to-
the-market method.
Monitoring of operational risks
At Postbank, two basic types of risk are classified as operational risks: the oper-
ating event risk covers risks relating to faulty processes, insufficient controls
and events beyond the Bank’s control, while the business risk covers the risk of
an unexpected rise in costs or fall in income. In addition to its existing internal
control systems and the regular checks by internal audit staff, the Bank also
produced a comprehensive catalog of operational risks conforming with uniform
standards in the course of the past fiscal year. In this way, Postbank has taken
the first step towards cataloging operational risks at the overall Bank level.
1999 Group Management Report
Jahr 1999 Ausblick Risk reporting
The risk control department informs the member of the Management Board with
responsibility for this area and the risk control managers on a daily basis of the
results of transactions as well as of limit utilizations in the case of market price
and counterparty risks. The entire Management Board receives this information
in the form of a monthly report, together with the results of backtesting and the
scenario analyses. The monthly report also contains the aggregate market pos-
ition for the Bank as a whole, including non-trading positions.
Summary
Postbank has not only created the basis for a successful risk management sys-
tem and effective risk monitoring at the overall Bank level, but has also laid
the foundations for the rapid and successful integration of DSL Bank from a
risk management point of view. In addition, the risks arising from the extensive
projects to implement Postbank’s vision in the year 2000 (our program for the
future) are controlled and monitored via detailed, tightly run project manage-
ment.
46
47
Postbank’s strategic goals in the current fiscal year 2000 are closely bound up
with Deutsche Post. Postbank is affected in a number of areas: for example, in
the summer “Postbank EasyTrade.AG“, its new brokerage company, will be
launched onto the market with an attractive range of services. This not only
enables Postbank, as part of the Deutsche Post WorldNet Group, to maintain
securities accounts for Group employees. Independently of this, Postbank will be
able to round off its product range in this decisive area and increasingly take on
the role of a principal bank for its 10 million customers. The challenge is to ex-
ploit the resulting cross-selling potential in a profitable manner. Postbank
EasyTrade’s business plan is already forecasting a number of securities accounts
for the current fiscal year that will make Postbank one of the major players in
the sector.
Postbank has undertaken to do its bit to contribute to Group success and to fur-
ther improve its earnings situation. One key aspect here is the rapid and suc-
cessful integration of DSL Bank. With total assets of over DM 270 billion, the
new institute will be one of the major banks in Germany. In particular, the ratio
between assets and liabilities and shareholders’ equity will be put on a new,
more balanced footing.
In addition, it is decisive for the implementation of Postbank’s vision in the year
2000 to strengthen our sales culture and the quality of the advice we provide.
As a true multi-channel bank, we will continue to implement corresponding
measures in order to be able to offer customers appropriate products in our
branch offices, on the telephone or via the Internet. Further improvements in
efficiency and in our IT orientation are absolutely vital if we are to achieve this
end. Our goal of achieving a further substantial increase in our operating result
is closely linked to further progress in Postbank’s program for the future. This
includes implementing Postbank’s new organizational structure in practice.
Outlook
1999 Group Management Report
Initial trends for the current fiscal year show that Postbank is on the right track
here. We need to perpetuate and strengthen this trend in our core business in
particular. We were able to halt the decline in private checking accounts in 1999
and are aiming for a slight increase in 2000. We intend to preserve and expand
our position as Germany’s leading savings bank by offering market and cus-
tomer-oriented products at attractive conditions. In the investment funds sector,
our goal is to repeat the record results we achieved in 1999. And, together with
DSL Bank, we can achieve our ambitious growth targets in the mortgage lending
sector.
We are aware of the fact that Deutsche Postbank AG will be in the public eye
in the year 2000. We will do everything in our power to further strengthen the
positive developments we have initiated at all levels of the Bank.
Bonn, March 15, 2000
Deutsche Postbank AG
The Management Board
Prof. Dr. Wulf von Schimmelmann Volker Mai Loukas Rizos Achim Scholz
I. General information
The consolidated financial statements of Deutsche Postbank AG have been pre-
pared in accordance with the provisions of the Handelsgesetzbuch (HGB – German
Commercial Code) and the Aktiengesetz (AktG – German Public Companies Act)
together with the Verordnung über die Rechnungslegung der Kreditinstitute und
Finanzdienstleistungsinstitute (RechKredV – German Bank Accounting Regula-
tion) and cover the period January 1 to December 31, 1999.
II. Companies consolidated
Eleven companies were fully consolidated in the consolidated financial state-
ments of Deutsche Postbank AG in addition to Deutsche Postbank AG as the
parent company. Of these eleven companies, four are foreign and three were
included in consolidation for the first time. Two companies were consolidated
proportionately and for the first time.
Four companies were included as affiliates, all for the first time. Two of these
companies are foreign-domiciled companies.
Three companies were not included in consolidation in accordance with section
296 (2) HGB, and a further five companies were omitted in accordance with sec-
tion 311 (2) HGB due to their insignificance for the presentation of a true and
fair view of the net assets, financial position and results of operations.
A detailed list of the companies included in the consolidated financial statements
and of those companies not included in consolidation is presented elsewhere in
these Notes.
III. Consolidation principles
In accordance with section 308 HGB, the consolidated financial statements were
prepared on the basis of the consistent accounting policies applied at Deutsche
Postbank AG.
Capital consolidation was effected by netting the book values of the invest-
ments at the parent company against the equity of the consolidated companies
in accordance with section 301 (1) sentence 2 clause 1 HGB (purchase method).
notes
48
49
A. General information on the
classification of the annual financial
statements and on the accounting
policies applied
1999 Notes
In accordance with section 301 (2) HGB, capital consolidation is generally effec-
ted at the date of acquisition of the Group company concerned. An exception
has been made in the case of one fully consolidated company, for which capital
consolidation was effected at the date of first-time consolidation. The resulting
net income for the year of DM 0.3 million was eliminated in the Group income
statement by creating an adjustment item.
Asset-side differences are deducted from reserves or are taken to assets as hid-
den reserves. During the year under review, asset-side differences resulting from
the capital consolidation of proportionately consolidated companies amounted
to DM 2 million; this amount was eliminated against other revenue reserves.
In the consolidated financial statements, investments in associates are carried
at the book value at the balance sheet date of the consolidated financial state-
ments (December 31, 1999) using the equity method in accordance with section
312 (1) sentence 1 clause 1 HGB and adjusted in accordance with section 312
HGB. No adjustment was made to the measurement methods applied at the par-
ent company. An asset-side difference of DM 49 million arose at one associate;
this is contained in the item “Investments in associates“.
Intercompany receivables and liabilities as well as income and expenses were
eliminated.
Due to the insignificance for the presentation of the net assets, financial pos-
ition and results of operations of the Group, intercompany profits from intragroup
deliveries of goods and services were not eliminated in accordance with section
304 (3) HGB. Adjustments due to timing differences in the carrying values are
recognized in income. Appropriate deferred tax assets in accordance with section
306 HGB were provided to reflect consolidation measures recognized in income
in accordance with section 303 HGB.
IV. Accounting policies
The cash in hand, balances with central banks, due from banks and from cus-
tomers are carried at their nominal amounts including accrued interest.
The registered securities and borrower’s note loans contained in the due from
banks and from customers are carried at their nominal amounts plus accrued
interest in accordance with section 340e (2) sentence 1 HGB. The difference
between the nominal amounts and the acquisition cost was deferred and re-
leased on a regular basis.
to the consolidated financial statements
Structure of the balance sheet 1999, assets
in DM million 1995 1996 1997 1998 1999
Liquid funds 5,399 4,741 7,234 3,954 2,983
Due from banks 40,347 59,529 59,863 63,309 52,796
Due from
customers 4,953 5,961 3,522 5,653 6,977
Securities 44,705 33,096 37,200 37,416 45,740
Due from affiliates – – – – –
Other assets 3,817 3,461 3,636 3,747 8,794
Total 99,221 106,788 111,455 114,079 117,291
Liquid funds
Other assets
Due from banks
Due from customers
Securities
Bonds and notes carried under fixed assets are carried at cost in accordance
with the moderated principle of lower of cost or market (section 340e (1) HGB).
Differences between acquisition costs and the redemption amount
(premiums/discounts) were allocated pro rata temporis.
Bonds, other fixed-income securities and shares and other non-fixed-income
securities (investment fund shares) classified as current assets are carried at his-
torical cost in accordance with the strict principle of lower of cost or market and
the requirement to reverse write-downs where the reasons for them no longer
exist (section 340e (1) sentence 2 HGB in conjunction with section 253 (3) sen-
tence 1 HGB and section 280 HGB). Single valuation units have been formed
where fixed-income securities are secured by swap transactions with matching
amounts, currencies and maturities.
Investments in non-affiliated and affiliated companies are carried at cost.
Trust assets and liabilities are carried at their respective nominal amounts.
Equalization claims from the 1990 currency conversion are carried in accordance
with the D-Mark-Bilanzgesetz (DMBilG – D-mark Accounting Act).
Tangible assets are carried at cost less regular depreciation in accordance with
the standard useful life on the basis of the official tax depreciation tables.
50
51
1999 Notes
Structure of the balance sheet 1999, liabilities and shareholders’ equity
in DM million 1995 1996 1997 1998 1999
Savings deposits 57,055 59,799 60,723 62,699 57,600
Savings certificates,
term deposits 5,962 9,584 9,615 10,808 15,743
Demand deposits 28,603 27,942 26,786 28,371 30,375
Capital and reserves 4,318 3,104 3,131 3,147 4,077
Other liabilities and
shareholders’ equity 3,283 6,359 11,200 9,054 9,496
Total 99,221 106,788 111,455 114,079 117,291
Other liabilities and shareholders’ equity
Capital and reserves
Savings certificates and term deposits
Demand deposits
Savings certificates and term deposits
Exceptional write-downs taken account of probable lasting impairment. Low-
value assets are written off in full in the year of acquisition in accordance with
6 (2) EStG.
Liabilities are carried at their redemption amount plus deferred interest.
Provisions for current pensions and vested pension entitlements are set up in
the amount allowed by commercial law. Pension provisions are measured on
the basis of the 1998 Heubeck mortality tables. The interest rate is unchanged
at 6 percent.
Provisions for taxes and other provisions take account of identifiable risks
where the obligation and/or the amount is uncertain. Jubilee provisions are
set up in the maximum amount allowed by tax law.
Full account is taken of specific banking risks by the application of strict risk
assessment standards. Specific and general valuation allowances take account
of identifiable specific risks and the general credit risk.
Derivatives were individually measured at their fair value or market value at the
closing date in accordance with the realization and imparity principle. Where
derivative and primary financial instruments form a single entity, valuation units
were formed on the basis of ex-ante-defined strict criteria.
V. Currency translation
Foreign currency receivables and liabilities were translated into DM at the
mean spot rates at the balance sheet date in accordance with section 340h (1)
sentence 2 HGB. Differences from the translation of rate-hedged balance sheet
items and corresponding pending transactions were eliminated by setting up
adjustments.
Balance sheet items and pending transactions denominated in foreign currencies
are measured in each currency in accordance with section 340h (2) sentence 2
HGB and classified as separately covered. All income and expenses from foreign
currency translation are therefore recognized in the income statement in accord-
ance with section 340h (2) sentence 1 and 2 HGB. There were no income items
to be disclosed separately because there were no substantial timing differences
items at the balance sheet date due to the high turnover rate.
VI. Ownership
In accordance with section 20 (1) and (4) in conjunction with section 16 (1) and
2 AktG, Deutsche Post AG has notified us that it holds all shares of Deutsche
Postbank AG as of December 31, 1999 with the exception of 100 shares.
The Deutsche Postbank Group was included for the first time in the consolidated
financial statements of Deutsche Post AG, Bonn, as of December 31, 1999. The
financial statements of Deutsche Post AG are filed with the Bonn Commercial
Register.
I. Balance sheet
“Due from banks“ contain subordinated borrower’s note loans
amounting to DM 31 million.
“Due from customers“ contain subordinated loans amounting to
DM 2 million.
52
53
B. Notes to the balance sheet and
the income statement
1999 Notes
Holdings of marketable securities:
Dec. 31, 1999 Dec. 31, 1998
in DM million in DM million
Bonds and other fixed-income securities
listed 26,447 27,015
unlisted 10 143
Shares and other non-fixed-income securities
listed 77 90
Investments in affiliated companies
listed 4 0
DM 4,013 million of the securities are classified as fixed assets. Amounts of
bonds and other fixed-income securities falling due in the following year
amount to DM 8,706 million.
“Participations“ do not contain any marketable securities.
The “fiduciary assets“ disclosed in the amount of DM 163 million (previous
year: DM 164 million) relate exclusively to pass-through loans to employees of
companies of the former Deutsche Bundespost financed by postal savings and
loan associations. Fiduciary liabilities in the same amount were disclosed.
The land, buildings, assets under construction and leasehold improvements
contained under “tangible assets“ amounting to DM 1,840 million (previous
year: DM 1,771 million) were used by Deutsche Postbank AG in the amount of
DM 1,338 million (previous year: DM 1,454 million) as part of its own business
activities. Operating and office equipment amounted to DM 222 million (previous
year: DM 260 million).
“Other assets“ include collection documents amounting to DM 3,122 million
(previous year: DM 385 million) and prepayments of DM 702 million, among
other things.
At the reporting date, foreign currency assets and receivables amounted to
DM 1,525 million (previous year: DM 2,856 million) and DM 245 million respect-
ively (previous year: DM 739 million).
“Deferred items and prepaid expenses“ include a premium of DM 74 million
(previous year: DM 3 million), among other things. The premium results from
the measurement of borrower’s note loans and registered bonds at face value.
It also includes prepayments of services not yet received amounting to
DM 650 million.
Statement of changes in consolidated fixed assets
Historical cost
Balance at Balance at Jan. 1, 1999 Additions Disposals Reclassifications Dec. 31, 1999
DM DM DM DM DM
1. Investments in affiliatedcompanies 4,055,000.00 102,000.03 – – 4,157.000.03
2. Participations 44,490,310.00 – 26,575,000.00 – 17,915,310.00
3. Bonds and other fixed- income securities 1) – 4,013,431,333.87 – – 4,013,431,333.87
4. Investments in associated companies – 598,676,704.83 – – 598,676,704.83
5. Intangible assets 263,812,556.18 28,520,076.46 45,250,549.96 – 13,670.96 246,798,411.72
6. Tangible assets 2,657,004,996.64 215,292,878.59 74,280,801.66 13,670.96 2,798,030,744.54
2,969,362,862.82 4,856,022,993.78 146,106,351.62 – 7,679,009,504.98
1) Securities reclassified as fixed assets
Maturity structure of selected assets items by remaining maturity
Dec. 31, 1999 Dec. 31, 1998
in DM million in DM million
Due from banks 51,403 62,304
of which with an indefinite time to maturity – –
remaining maturity of 3 months or less 19,312 30,411
remaining maturity of between 3 months and 1 year 8,277 9,816
remaining maturity of between 1 and 5 years 16,220 17,404
remaining maturity of more than 5 years 7,594 4,673
Due from customers 6,977 5,653
of which with an indefinite time to maturity 1,190 754
remaining maturity of 3 months or less 1,168 2,188
remaining maturity of between 3 months and 1 year 1,186 309
remaining maturity of between 1 and 5 years 1,195 1,030
remaining maturity of more than 5 years 2,238 1,372
54
55
1999 Notes
Depreciation/amortization Net book value
Balance at Depreciation/amortization Balance at Jan. 1, 1999 in the fiscal year Disposals Transfers Dec. 31, 1999 Dec. 31, 1999 Dec. 31, 1998
DM DM DM DM DM DM DM
– – – – – 4,157,000.03 4,055,000.00
– – – – – 17,915,310.00 44,490,310.00
– – – – – 4,013,431,333.87 –
– – – – – 598,676,704.83 –
154,656,691.27 43,533,439.20 40,363,677.07 – 157,846,453.40 88,951,958.32 109,155,864.91
625,556,342.37 169,772,185.86 68,279,051.19 – 727,049,477.05 2,070,964,642.15 2,031,448,654.27
780,213,033.64 213,325,625.06 108,642,728.26 – 884,895,930.44 6,794,096,949.20 2,189,149,829.18
Equivalent securities were pledged as part of an open market transaction and
a lombard loan with the Deutsche Bundesbank amounting to DM 1,490 million
(previous year: DM 1,176 million) under the terms of the security pooling system.
“Deferred income“ contains discounts of DM 6 million (previous year: DM 5 mil-
lion). The discounts result from the measurement of borrower’s note loans and
registered bonds at face value. This item also includes discounts from mortgage
lending amounting to DM 5 million.
The provision of DM 1,043 million for the joint sales network was released due
to restructuring and the consequence amendment to the cooperation agreement
with Deutsche Post AG.
In accordance with Article 5 (1) of the Articles of Association, the “subscribed
share capital” amounts to DM 800 million. It is composed of 16 million bearer
shares each with a nominal value of DM 50.
DM 1,300 million was transferred to the “fund for general banking risks”.
DM 750 million of the net income of Deutsche Postbank AG amounting to
DM 857 million will be distributed to the shareholder. In accordance with Article
22 (3) of the Articles of Association of Deutsche Postbank AG, DM 108 million
will be appropriated to “other revenue reserves“ after allowance for minority
interests (DM 1 million).
After adoption of the annual financial statements, unrealized reserves from
securities amounting to DM 359 million will be appropriated to liable capital
in accordance with section 10 (4a) sentence 1 KWG.
Structure of the income statement 1999, expenses
in DM million 1995 1996 1997 1998 1999
Interest and commission
expenses 2,469 2,353 2,465 2,778 2,470
Net income for the year 226 – 27 16 857
Other administrative
expenses 2,013 2,030 1,829 1,794 1,619
Other expenses 91 1,818 1,167 264 1,730
Depreciation/
amortization 189 200 205 208 213
Transfer to federal government 196 – – – –
Personnel expenses 1,843 1,489 1,881 1,430 1,354
Total 7,027 7,890 7,574 6,490 8,243
Interest and commission expenses
Net income for the year
Other expenses
Depreciation/amortization
Personnel expenses
Maturity structure of selected liabilities items by remaining maturity
Dec. 31, 1999 Dec. 31, 1998
in DM million in DM million
Due to banks with an agreed maturity or period of notice 2,089 4,049
of which with an indefinite time to maturity – –
remaining maturity of 3 months or less 753 3,941
remaining maturity of between 3 months and 1 year 1,193 95
remaining maturity of between 1 and 5 years 116 –
remaining maturity of more than 5 years 27 13
Savings deposits with an agreedperiod of notice of more than 3 months 3,112 8,326
of which with an indefinite time to maturity – –
remaining maturity of 3 months or less 573 2,227
remaining maturity of between 3 months and 1 year 844 3,292
remaining maturity of between 1 and 5 years 1,692 2,793
remaining maturity of more than 5 years 3 14
Due to customers with an agreedmaturity or period of notice 15,743 10,808
of which with an indefinite time to maturity – –
remaining maturity of 3 months or less 8,323 6,567
remaining maturity of between 3 months and 1 year 3,975 1,859
remaining maturity of between 1 and 5 years 3,348 2,272
remaining maturity of more than 5 years 97 110
56
57
1999 Notes
Structure of the income statement 1999, income
in DM million 1995 1996 1997 1998 1999
Commission income 928 888 946 839 844
Other income 495 642 1,516 286 2,226
Interest income 5,604 5,104 5,112 5,365 5,173
Net loss for the year – 1,256 – – –
Total 7,027 7,890 7,574 6,490 8,243
Commission income
Interest income
Other income
II. Income statement
“Other operating income“ contains reimbursed excess amounts paid in 1998
(DM 99 million) for service and sales network services.
The release of the provision for the joint sales network of DM 1,043 million
was disclosed as “extraordinary income”.
The restructuring of the company pension plan resulted in an “extraordinary
expense” of DM 73 million.
The “taxes on income” result almost exclusively from the taxable distribution.
I. Forward transactions
Forward transactions not settled at the balance sheet date are presented below.
Derivative transactions – Volumes
in DM million Nominal values Credit risk equi- Replacementvalents (6th amend- costment to the KWG)
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1999
Interest rate risks
OTC products
Interest rate swaps 6,915 5,479 13 37
FRAs 939 866 0 0
Exchange-trade products
Interest rate futures 916 9 0 0
Total 8,770 6,354 13 37
Currency risks
OTC products
Currency forwards/swaps 1,523 3,961 4 5
Interest rate/currency swaps 70 40 1 1
Total 1,593 4,001 5 6
The nominal values represent the gross volume of all buy and sell transactions.
To increase the clarity and comparability of presentation, the credit risk equiva-
lents and the replacement cost are presented to enable risk assessment.
The credit risk equivalents were measured by marking-to-market and reflect
counterparty weightings. No netting procedures were applied.
The replacement cost refers to all contracts with positive fair values. These were
not eliminated against contracts with negative fair values.
58
59
C. Other disclosures
1999 Notes
II. Contingent liabilities
There were contingent liabilities at the balance sheet date in the form of
guarantees and indemnities amounting to DM 2,166 million (previous year:
DM 332 million).
The guarantees and indemnities include a master guarantee to a credit insti-
tution to secure certain committed housing construction loans (DM 1,500 million).
Derivative transactions – Maturities
Nominal values Interest rate risks Currency risks Shares and otherin DM million price risks
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1998
Remaining maturity
of 3 months or less 2,777 3,104 1,117 2,824 0 0
3 months to 1 year 2,435 1,099 406 1,137 0 0
1 to 5 years 2,756 1,714 70 0 0 0
more than 5 years 802 437 0 40 0 0
Total 8,770 6,354 1,593 4,001 0 0
Derivative transactions – Counterparty classification
Nominal values Nominal values Credit risk equivalents (6th Replacement costin DM million amendment to the KWG)
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1999
Banks in OECD 10,363 10,355 18 43
Banks outside OECD
Public sector in OECD
Other
Counterparties
Total 10,363 10,355 18 43
Derivative transactions – Commercial transactions
Nominal values Nominal values Credit risk equivalents (6th Replacement costin DM million amendment to the KWG)
Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1999 Dec. 31, 1999
Interest rate contracts 749 193 0 0
Currency contracts 1 0 0 0
Total commercial transactions 750 193 0 0
Deutsche Postbank AG has issued a recoverability guarantee of DM 653 million
to investors in Luxembourg investment funds in the amount of the initial sub-
scription price.
There are additional funding obligations from the voluntary deposit protection
fund of Bundesverband Öffentlicher Banken Deutschlands e. V. in the amount set
out in the articles, and from the statutory deposit protection fund.
III. Other financial obligations
In accordance with Article 4 section 16 PTNeuOG, Postbank is required to pay
DM 310 million per annum until 1999 inclusive and 33 percent of the gross com-
pensation of its active civil servants and the notional gross compensation of its
suspended civil servants in the subsequent years to its welfare fund established
for this purpose. Any obligations of Postbank for payments to the welfare fund
exceeding the above amounts are borne by the federal government.
IV. Employees
Average number of Postbank employees in the year under review:
female male total
Full-time
Civil servants 4,353 1,526 5,879
Salaried employees 2,324 1,537 3,861
Hourly paid workers 62 243 305
6,739 3,306 10,045
Part-time
Civil servants 1,212 9 1,221
Salaried employees 499 12 511
Hourly paid workers 16 3 19
1,727 24 1,751
8,466 3,330 11,796
In addition, the Deutsche Postbank Group employed 626 apprentices and 24
trainees as of December 31, 1999.
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61
1999 Notes
V. Remuneration of the Management Board and the Supervisory Board
Total remuneration paid to the members of the Management Board in the period
under review amounted to DM 2,852 thousand.
DM 8,914 thousand were paid to former members of the Management Board.
Provisions for pensions amounting to DM 20,152 thousand and covering all ob-
ligations existed for this circle of people.
Loans amounting to DM 462 thousand had been granted to members of the
Management Board at the balance sheet date. No other contingent liabilities had
been entered into.
The remuneration paid to the Supervisory Board amounted to DM 569 thousand.
VI. Related party disclosures
Schedule of shareholdings of Deutsche Postbank AG in accordance with section
285 clause 11 HGB and section 313 (2) HGB:
Interest (%) Interest (%)
direct indirect
Name and registered office of the company
1) Fully consolidated companies:
Deutsche Postbank International S.A., Luxembourg 100.0
Deutsche Postbank Asset-Management S.A., Luxembourg 100.0
Deutsche Postbank Capital-Management S.A., Luxembourg 100.0
Deutsche Postbank Vermögens-Management S.A., Luxembourg 100.0
Deutsche Postbank Invest Kapitalanlagegesellschaft mbH, Bonn 100.0
Deutsche Postbank Privat Investment Kapitalanlagegesellschaft mbH, Bonn 100.0
DSL Holding AG, Bonn 81.3
Postbank Data GmbH, Bonn 100.0
Postbank Immobilien und Baumanagement GmbH, Bonn 100.0
Postbank Immobilien und Baumanagement GmbH & Co. Objekt Leipzig KG, Bonn 90.0
Postbank Service GmbH, Bonn 100.0
2) Proportionately consolidated companies:
PB Lebensversicherung AG, Hilden 50.0
PB Versicherung AG, Hilden 50.0
3) Companies included in accordance with the equity method:
DSL Bank AöR, Bonn* 39.0
DSL Bank Luxembourg S. A., Luxembourg* 39.0
DSL Finance N. V., Amsterdam* 39.0
Ralos Verwaltung GmbH & Co. Vermietungs-KG, Munich* 39.0
4) Companies not included in consolidation:
Creda Objektanlage- und -verwaltungsgesellschaft mbH, Bonn* 39.0
DSL-Objekt 1. Hamburger GbR mbH, Bonn* 39.0
KORDOBA Gesellschaft für Bankensoftware mbH & Co.KG, Munich 23.0
KORDOBA Gesellschaft für Bankensoftware Verwaltungs mbH, Munich 23.0
InFo Score Business Support GmbH, Bonn 51.0
interServ Gesellschaft für Personal- und Beratungs-dienstleistungen mbH, Bonn 100.0
Sila Grundstücks-Vermietungsgesellschaft mbH, Bonn* 39.0
VöB-ZVD Zahlungsverkehrsdienstleistungs-Gesellschaft mbH, Bonn 75.0
* indirect investment via DSL Holding AG
62
63
1999 Notes
VII. Other information
According to section 2 (4) of the Postumwandlungsgesetz (PostUmwG – Postal
Reform Act) the federal government has provided a guarantee for all Deutsche
Postbank AG liabilities in existence at the time that the company was entered in
the Commercial Register. The federal government’s guarantee of savings deposits
ends no later than five years after the date of entry in the Commercial Register.
Deutsche Postbank AG has been a member of the Einlagensicherungsfonds des
Bundesverbandes Öffentlicher Banken Deutschlands e. V. (the deposit protection
fund maintained by the Association of German Public Sector Banks) since 1995.
Deutsche Postbank AG controlled more than 5 percent of the voting rights in
DSL Holding AG, Bonn, as of December 31, 1999.
Prof. Dr. Hans-E. Büschgen
Professor emeritus, Cologne
Dr. Edgar Ernst
Member of the Management Board
of Deutsche Post AG, Bonn
(since January 11, 1999)
Dr. Joachim Henke
Head of Department, Federal Finance
Ministry, Bonn
Prof. Dr. Ralf Krüger
Senior Adviser, Lazard&Co GmbH,
Frankfurt am Main
(since April 1, 2000)
Prof. Dr. Paul Laufs
Member of the Bundestag, Bonn
(until January 11, 1999)
Dipl.-Ing. Roman Lorenz
Vice-President, Dresden Chamber of
Trade and Commerce, Dresden
(until March 31, 2000)
Dr. Hans-Dieter Petram
Member of the Board of Deutsche
Post AG, Bonn
(since January 11, 1999)
Dr. Klaus Schlede
Chairman of the Supervisory Board
of Deutsche Lufthansa AG,
Cologne
(since April 1, 2000)
Dr. Manfred Schüler
State Secretary (retd.),
Bonn
Dr.-Ing. Dieter Soltmann
Personally liable partner of
Spaten-Franziskaner-Bräu KGaA,
Munich
64
65
D. Executive Bodies Management Board
Prof. Dr. Wulf von Schimmelmann
Chairman
Bonn
(since February 1, 1999)
Dr. Dieter Boening
Chairman
Wachtberg
(until January 31, 1999)
Rainer Neumann, Königswinter
(until October 31, 1999)
Volker Mai, Bad Honnef
Loukas Rizos, Frankfurt am Main
(since February 14, 2000)
Achim Scholz, Bonn
Joachim Sperbel, Overath
(until January 31, 1999)
Supervisory Board
1. Shareholder representatives
Dr. Klaus Zumwinkel
Chairman
Chairman of the Management Board
of Deutsche Post AG, Bonn
(since January 11, 1999)
Dr. Hans Friderichs
Chairman
Federal Minister (retd.), Mainz
(until January 7, 1999)
Dr. Thea Brünner
Managing Director of Verbraucher-
zentrale Berlin e. V., Berlin
(until January 8, 1999)
1999 Executive Bodies
Dr. Alfred Tacke
State Secretary, Federal Ministry of
Economics and Technology, Bonn
(since January 11, 1999)
Alfred Waiß
Postdirektor (retd.), Stuttgart
(until March 31, 2000)
2. Employee representatives
Michael Sommer
Deputy Chairman
Deputy Chairman of the German
Postal and Telecommunications
Workers’ Union,
Frankfurt am Main
Marietta Auer
Head of Department, Deutsche
Postbank AG, Unterhaching
Ralf Höhmann
Member of the Postbank Stuttgart
Branch Works Council, Stuttgart
Elmar Kallfelz
Chairman of the Main Works Council
of Deutsche Postbank AG, Meckenheim
Sabine Lerner
Head of Special Projects,
Deutsche Postbank AG, Rheinbach
Prof. Dr. Wulf von Schimmelmann Volker Mai Loukas Rizos Achim Scholz
Bernd Lindenau
Regional Chairman, German Postal
and Telecommunications Workers’
Union, Berlin
Werner Schulte
Northern Regional Chairman, German
Postal and Telecommunications
Workers’ Union, Kiel
Sabine Schwarz
Chairwoman of the workers’ Council,
Postbank Berlin Branch, Berlin
Christine Weiler
Chairwoman of the workers’ Council,
Postbank Munich Branch, Munich
Walter Wortmann
Chairman of the Postbank Dortmund
Branch Works Council, Dortmund
Bonn, April 2000
Deutsche Postbank AG
The Management Board
Audit opinion “We have audited the consolidated financial statements and the Group manage-
ment report of Deutsche Postbank AG, Bonn, for the fiscal year January 1 to
December 31, 1999. The consolidated financial statements and the Group manage-
ment report in accordance with the provisions of the HGB (German Commercial
Code) are the responsibility of the legal representatives of Deutsche Postbank
AG. Our responsibility is to express an opinion, based on our audit, on the con-
solidated financial statements and the Group management report.
We conducted our audit in accordance with section 317 of the HGB and in com-
pliance with the principles of proper auditing adopted by the Institut der Wirt-
schaftsprüfer (IDW). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether inaccuracies and violations are
identified that could have a material effect on the view of the financial position
and results of operations presented by the financial statements prepared in
accordance with proper accounting principles and the management report. The
process of defining the audit procedures takes account of knowledge about the
business activities and the economic and legal environment of the Group, as
well as expectations of possible errors. An audit includes examining, largely on a
test basis, the effectiveness of the internal control system and evidence support-
ing the amounts and disclosures in the consolidated financial statements and
the Group management report. An audit also includes assessing the annual
financial statements of the companies included in the consolidated financial
statements, the definition of the companies consolidated, the accounting and
consolidation principles used and significant estimates made by the legal repre-
sentatives, as well as evaluating the overall presentation of the consolidated
financial statements and the Group management report. We believe that our
audit provides a reasonable basis for our opinion.
Our audit did not give rise to any objections.
In our opinion, the consolidated financial statements give, in accordance with
proper accounting principles, a true and fair view of the financial position of the
Group and of the results of its operations. Overall, the Group management
report accurately reflects the position of the Group and fairly presents the risks
associated with future developments.“
Düsseldorf, February 23, 2000
PwC Deutsche RevisionAktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Kütter Güldenberg
Wirtschaftsprüfer Wirtschaftsprüfer
66
67
1999 Audit opinion
General Manager
Lothar Rogg, Heiligenhaus
(since October 1, 1999)
Directors in 1999
Heiko Fischer, Gütersloh
(since August 1, 1999)
Michael Flötenmeyer, Witten
Bernd Geilen, Mendig
(until December 31, 1999)
Gerd Hartwig, Sankt Augustin
Dr. Wilhelm Hemmerde, Wachtberg
Werner Hille, Weinstadt
(since November 1, 1999)
Bernhard Koblischeck, Dannstadt
Klaus Kreienkamp, Velbert
(since October 1, 1999)
Thea Kutzscher, Mölkau
(since October 1, 1999)
Albert Lechner, Mehring
(since October 1, 1999)
Jürgen Lengwenat, Bad Iburg
(since August 1, 1999)
Manfred Löw, Bad Camberg
(since October 1, 1999)
Dr. Torsten Lund, Berlin
(since October 1, 1999)
Lutz Meyer, Freiburg
(since October 1, 1999)
Dr. Hans Molnar, Königswinter
Reiner Mothes, Schwaig
(since October 1, 1999) )
Uwe Nagel, Cologne
Hans-Jürgen Niehof, Berlin
(since October 1, 1999)
Andreas Nix, Kandel
(since October 1, 1999)
Peter Prill, Hamburg
(since October 1, 1999)
Dr. Dieter Richter, Troisdorf
Gerd Richter, Sankt Augustin
(since October 1, 1999)
Peter Schmedes, Kaltenkirchen
(since October 1, 1999)
Klaus Schöniger, Hofheim
Prof. Dr. Gert Schukies, Verl
(since July 7, 1999)
Friedhelm Schwarze, Oberhausen
(since October 1, 1999)
Ralf Stemmer, Königswinter
(since October 1, 1999)
Heinz Wachter, Marl
(since October 1, 1999)
Norbert Wahl, Wiesbaden
Werner Wessinghage, Schwerte
(since October 1, 1999)
Andrea Wiegand, Bochum
68
69
Assets DM DM DM DM thousand
Dec. 31, 1998
1. Cash reserves
a) Cash in hand 2,534,394,387.69 2,911,454
b) Balances with central banks 448,910,811.56 1,042,891
of which: with the Deutsche Bundesbank
DM 243,657,563.82 (prior year: DM 1,042,891 thousand)
c) Balances in postal giro accounts –.– 2,983,305,199.25 –
2. Debt and bills issued by public-sector borrowers
eligible for refinancing at central banks
a) Treasury bills, discounted treasury notes
and similar treasury securities –.–
b) Bills 23,815,933.09 23,815,933.09 –
of which: eligible for funding with the Deutsche Bundesbank
DM 23,815,933.09 (prior year: DM 0 thousand)
3. Due from banks
a) payable on demand 1,393,524,334.30 1,005,388
b) other receivables 51,402,603,466.18 52,796,127,800.48 62,304,043
4. Due from customers 6,976,956,920.35 5,653,291
of which: secured by mortgages
DM 1,958,464,537.96 (prior year: DM 1,026,821 thousand)
communal loans DM 571,350,522.11 (prior year: DM 1,866,045 thousand)
5. Bonds and other fixed-income securities
a) Money market securities
aa) from public-sector issuers –.– –
of which: eligible as collateral
for advances from the Deutsche Bundesbank
DM 0 (prior year: DM 0 thousand)
ab) from other issuers 459,957,963.60 459,957,963.60 50,266
of which: eligible as collateral
or advances from the Deutsche Bundesbank
DM 152,278,432.60 (prior year: DM 50,266 thousand)
b) Bonds and notes
ba) from public sector issuers 2,910,193,392.97 6,545,438
of which: eligible as collateral
for advances from the Deutsche Bundesbank
DM 2,571,927,384.58 (prior year: DM 6,323,125 thousand)
bb) from other issuers 27,929,751,207.07 30,839,944,600.04 20,563,112
of which: eligible as collateral
for advances from the Deutsche Bundesbank
DM 21,614,547,514.08 (prior year: DM 15,937,661 thousand)
c) own bonds –.– 31,299,902,563.64 –
nominal value DM 0 (prior year: DM 0 thousand)
6. Shares and other non-fixed-income securities 14,439,926,565.73 10,257,602
7. Participations 616,592,014.83 44,490
of which: in credit institutions DM 0 (prior year: DM 0 thousand)
in financial services institutions DM 0 (prior year: DM 0 thousand)
8. Investments in affiliated companies 4,157,000.03 4,055
of which: in credit institutions DM 0 (prior year: DM 0 thousand)
in financial services institutions DM 0 (prior year: DM 0 thousand)
9. Fiduciary assets 162,900,211.51 163,987
of which: loans DM 162,900,187.04 (prior year: DM 163,987 thousand)
10. Equalization claims against the government
including debt securities from their conversion 864,520,175.75 880,736
11. Intangible assets 88,954,313.28 109,156
12. Tangible assets 2,070,964,642.15 2,031,449
13. Other assets 4,066,321,857.23 434,678
14. Deferred items and prepaid expenses 896,781,302.11 77,084
Total assets 117,291,226,499.43 114,079,120
Consolidated balance sheet as of December 31, 1999
1999 Consolidated balance sheet
Liabilities and shareholders’ equity DM DM DM DM thousand
Dec. 31, 1998
1. Due to banks
a) payable on demand 3,278,737,251.51 1,375,663
b) with an agreed maturity or period of notice 2,089,354,687.13 5,368,091,938.64 4,048,630
2. Due to customers
a) Savings deposits
aa) with an agreed period of
notice of 3 months 54,488,509,816.05 54,373,103
ab) with an agreed period of
notice of more than 3 months 3,111,628,399.84 57,600,138,215.89 8,325,885
b) other liabilities
ba) payable on demand 30,374,951,519.33 28,370,720
bb) with an agreed maturity or
period of notice 15,742,994,009.41 46,117,945,528.74 103,718,083,744.63 10,808,315
3. Fiduciary liabilities 162,900,187.04 163,987
of which: loans DM 162,900,187.04
(prior year: DM 163,987 thousand)
4. Other liabilities 188,728,795.52 272,483
5. Deferred income 139,479,158.23 118,834
6. Provisions
a) Provisions for pensions and
similar obligations 846,734,490.98 737,513
b) Provisions for taxes 282,722,919.04 22,433
c) Other provisions 1,207,327,689.40 2,336,785,099.42 2,314,963
7. Fund for general banking risks 1,300,000,000.00 –
8. Capital and reserves
a) Subscribed share capital 800,000,000.00 800,000
b) Capital reserve 2,268,575,398.04 2,268,575
c) Revenue reserves 187,467,763.60 81,060
d) Minority interests 71,114,414.31 – 3,044
e) Distributable profit 750,000,000.00 4,077,157,575.95 0
Total liabilities and shareholders’ equity 117,291,226,499.43 114,079,120
1. Contingent liabilities
a) Contingent liabilities on endorsed
bills settled with customers –.– 46,600
b) Liabilities on guarantees and
warranty agreements* 2,166,024,590.75 285,341
c) Liability from the provision of
security for third-party liabilities –.– 2,166,024,590.75 –
2. Other obligations
a) Commitments from the sale of
assets subject to repurchase agreements –.– –
b) Placement and underwriting commitments –.– –
c) Irrevocable credit commitments 2,300,939,914.43 2,300,939,914.43 274,393
* Obligations from comfort letters are given in the annex under point C.II.
70
71
Expenses DM DM DM DM thousand
Prior year
1. Interest expenses 2,409,694,347.96 2,726,387
2. Commission expenses 59,976,725.88 51,457
3. Costs relating to insurance business 4,558,584.25 –
4. General and administrative expenses
a) Personnel expenses
aa) Wages and salaries 820,537,089.31 864,715
ab) Social security contributions and expenses
for pensions and other employee benefits 533,023,849.12 1,353,560,938.43 565,157
of which: pension expenses DM 442,769,215.16
(prior year: DM 423,862 thousand)
b) Other administrative expenses 1,618,734,271.73 2,972,295,210.16 1,794,318
5. Amortization, depreciation and adjustments
to intangible and tangible assets 213,463,792.26 207,508
6. Other operating expenses 54,574,863.54 49,712
7. Write-downs and adjustments to receivables
and certain securities and loan loss
provisions –.– 203,164
8. Additions to the fund for general banking risks 1,300,000,000.00 –
9. Extraordinary expenses 73,453,956.50 –
10. Taxes on income 290,492,907.68 6,558
11. Other taxes not disclosed under item 6 7,298,594.09 5,830
12. Net income for the year 857,119,126.15 15,527
Total expenses 8,242,928,108.47 6,490,333
Consolidated income statement
for the period January 1 to December 31, 1999
1999 Consolidated Income Statement
Income DM DM DM thousand
Prior year
1. Interest income from
a) lending and money market transactions 2,792,721,297.95 2,925,522
b) fixed-income securities
and book-entry securities 1,867,924,618.79 4,660,645,916.74 1,961,308
2. Current income from
a) shares and other non-fixed-income
securities 511,937,598.89 477,894
b) Participations –.– –
c) investments in affiliated companies 517,569.63 512,455,168.52 318
3. Income from profit pools, profit and loss transfer agreements
and partial profit and loss transfer agreements 1,784,688.57 173
4. Commission income 844,446,513.67 839,358
5. Income from insurance business 7,745,097.24 –
6. Net profit on financial operations 7,313,385.43 28,568
7. Income from revaluations of receivables
and certain securities and from the reversal
of loan loss provisions 915,829,593.85 –
8. Income from revaluations of participations,
investments in affiliated companies
and securities classified as long-term investments 1,928,209.01 –
9. Other operating income 247,779,535.44 257,192
10. Extraordinary income 1,043,000,000.00 –
Total income 8,242,928,108.47 6,490,333
1. Net income for the year 857,119,126.15 15,527
2. Consolidated retained profits/accumulated loss brought
forward from previous year dividend/appropriation – –
3. Profit attributable to minority interests 878,308.33 291
4. Withdrawal from revenue reserves
a) from the legal reserve – –
b) from the reserve for own shares – –
c) from statutory reserves – –
d) from other revenue reserves – –
5. Allocation to revenue reserves
a) to the legal reserve – –
b) to the reserve for own shares – –
c) to statutory reserves – –
d) to other revenue reserves – 107,997,434.48 – 15,818
6. Distributable profit 750,000,000.00 0
Postbank addresses Postbank HeadquartersFriedrich-Ebert-Allee 114 –12653113 Bonn, GermanyPostfach 40 00✉ 53105 Bonn, Germany Phone: +49(0)2 28 920-0Fax: +49(0)2 28 920-2818/-2819Internet: www.postbank.deE-mail: direkt@postbankde
Subsidiaries
Postbank Data GmbH Friedrich-Ebert-Allee 114 –12653113 Bonn, GermanyPostfach 40 00✉ 53105 Bonn, GermanyPhone: +49(0)2 28 920-0Fax: +49(0)2 28 9 20-5810
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72
73
Deutsche Postbank InvestKapitalanlagegesellschaft mbHFriedrich-Ebert-Allee 114 –12653113 Bonn, GermanyPostfach 40 00✉ 53105 Bonn, Germany Phone: +49(0)2 28 920 - 0Fax: +49(0)2 28 920 - 1878
Deutsche PostbankPrivat InvestmentKapitalanlagegesellschaft mbHFriedrich-Ebert-Allee 114 –12653113 Bonn, GermanyPostfach 40 00✉ 53105 Bonn, Germany Phone: +49(0)2 28 920 - 0Fax: +49(0)2 28 920 - 76 99
PB Lebensversicherung AGNeustraße 6240721 Hilden, GermanyPostfach 10 10 54✉ 40710 Hilden, GermanyPhone: +49(0)21 03 3 45-100Fax: +49(0)21 03 3 45-109
PB Versicherung AGNeustraße 6240721 Hilden, GermanyPostfach 10 10 54✉ 40710 Hilden, GermanyPhone: +49(0)21 03 3 45-100Fax: +49(0)21 03 3 45-109
1999 Postbank addresses
Acknowledgements
Published by:Deutsche Postbank AGHeadquartersFriedrich-Ebert-Allee 114 –12653113 Bonn, GermanyPostfach 40 00✉ 53105 Bonn, Germany
Phone: +49(0)2 28 920-0Fax: +49(0)2 28 9 20 -28 18/-2819Web: postbank.de
Retail customers:Postbank Direkt-ServicePhone: (0180) 30 40 - 500Fax: (0180) 30 40 - 800E-mail: [email protected]
Business customers:Business LinePhone: (0180) 30 40 - 900Fax: (0180) 30 40 - 999E-mail: [email protected]
Press:Phone: +49(0)2 28 920 - 11 10Fax: +49(0)2 28 920 - 18 10E-mail: [email protected]
Coordination, editing:Press and PR department
Text, design:Charles Barker GmbH, Frankfurt am Main
English translation:Fry & Bonthrone Partnerschaft, Mainz-Kastel
Photographs:Michael Hudler, Frankfurt am Main
Picture agencies:IFA-Bilderteam, business lifestyle This annual report is also published in German.